Trade as a channel for environmental technologies diffusion

Only a small number of companies, located in a few countries, have specific technological expertise in wind turbine manufacturing. New quantitative analysis shows this expertise to be a significant driver of trade in wind turbines. Moreover, countries’ wind power generation efficiency is shown to depend on access to higher quality wind turbines available in international markets. Trade in wind turbines thus provides access to technologies with a level of efficiency that cannot be replicated domestically in importing countries. These results have important policy implications: i) barriers to trade in wind turbines are also barriers to the dissemination of key environmental technologies which are not otherwise widely available; ii) trade-discriminatory measures can also negatively impact non-manufacturing job creation in the renewable sector, as this relies on the continuous deployment of wind energy, which in turn depends on access to high quality turbines from international markets; and iii) policies should not focus on the creation of national champions, but rather on ensuring that domestic firms can apply their specific capabilities to new opportunities in the global value chains of renewables industries.